Bidding window for freeport status closes

Bidding window for freeport status closes
London Gateway, part of the Thames Freeport bid

The application window for ports in England to apply for freeport status closed on February 5, with all the UK’s major seaport operators involved in one or more bids according to the UK Major Ports Group (UKMPG).

Bids have been made by operators in regions such as the Thames, Kent, Suffolk, the Humber, Tees, Tyne and Northumberland, Cumbria, Merseyside, the Avon and Somerset and the Solent.

The British Ports Association (BPA) is aware of approximately 35 organisations or consortia that have expressed an interest in bidding, publicly or privately, including 27 in England.

The bids include one by DP World and Forth Ports for a Thames Freeport, featuring London Gateway, the Port of Tilbury and Ford’s Dagenham engine plant and the Thames Enterprise Park (TEP).

Freeport East has also submitted a bid, combining the Port of Felixstowe and short-sea hub Harwich International Port, both run by Hutchison Ports, along with plans for a hydrogen hub.

Freeports form a key part of the government’s post-Brexit trade policy with successful bidders set to benefit from tax reliefs, simplified customs procedures and wider government support.

When the bidding process opened in November last year, British Chancellor Rishi Sunak said: “Our new freeports will create national hubs for trade, innovation and commerce, levelling up communities across the UK, creating new jobs, and turbo-charging our economic recovery.

“As we embrace our new opportunities as an independent trading nation, we want to deliver lasting prosperity to the British people and Freeports will be key to delivering this.”

A firm will be able to import goods into a freeport without paying tariffs, process them into a final good and then either pay a tariff on goods sold into the domestic market, or export the final goods without paying UK tariffs.

Areas given freeport status will also benefit from a wide package of tax reliefs, including on purchasing land, constructing or renovating buildings, investing in new plant and machinery assets and on Employer National Insurance Contributions.

The BPA has warned the government against selecting a small and arbitrary number of winners, which could disrupt the existing market.

Phoebe Warneford-Thomson, policy manager and economic analyst at the BPA, stated: “We hope that the government will assess each bid on its merit and not place an arbitrary cap on our ambitions.

“We would be surprised if there are not more than ten high quality and compelling bids so we hope government will assess each on their merits and retain an open mind on numbers.”

Meanwhile, the UKMPG has called for a fair and transparent process that allows for enough time and flexibility in to capture the most benefits, instead of prioritising speed of assessment.

Tim Morris, chief executive of the UKMPG, said: “It looks like bidders have risen to the challenge issued by the Government to deliver bids that offer real potential for stronger global gateways for trade, to boost prosperity and opportunity for coastal communities and that drive innovation.

“They also demonstrate commitment to high standards and growing social value. The challenge is now back to the government to assess fairly and in a considered manner a significant number of strong but quite different bids.”

Bids will be assessed by a Ministry of Housing, Communities and Local Government (MHCLG) chaired assessment panel in March 2021, with decisions made in spring. The first Freeports will be open for business in 2021.